In 2023, Laxman Narasimhan took the top spot.
New York, USA:
Chipotle CEO Brian Nichol will be the coffee chain’s new CEO, Starbucks said Tuesday — a year after current boss Laxman Narasimhan took over the role.
Narasimhan will step down as chief executive and member of the Starbucks board “effective immediately,” the company said in a statement.
Shares of Starbucks were up about 21 percent in afternoon trading, while shares of Chipotle Mexican Grill fell about eight percent.
The leadership changes come as Starbucks pushes to turn around its business while struggling with broad-based sales declines in its latest financial results.
The company also saw an earnings report in April that sent its shares crashing and prompted Narasimhan to promise a reset.
Starbucks previously attributed its problems to weak consumer sentiment and tough market conditions in China.
The company is also struggling with pressure from Elliott Investment Management’s activist fund, which is looking for ways to buy shares in the chain and boost its share price.
Meanwhile, the coffee giant is working to finalize contracts with unionized stores.
Lynn Fox, president of the Workers United union, said in a statement Tuesday: “We look forward to continuing to work with Starbucks to resolve the massive backlog of cases and reach fair collective bargaining agreements in the coming months.”
“The replacement of Laxman Narasimhan as Starbucks CEO was the result of growing dissatisfaction with the way the chain was run, particularly from activist investors,” Neil Sanders, managing director of Global Data, said in a statement.
“Some of the slowdown can be attributed to a more sluggish consumer downsizing, and a poor in-store experience and lack of innovation in areas such as food,” he added.
Investors can expect improvements in day-to-day operations with the arrival of Nicole.
“Brian is a culture carrier who brings a wealth of experience and a proven track record of innovation and growth,” Starbucks board chairman Melody Hobson said in a statement.
Nicole has served as CEO of Chipotle since 2018.
In naming him as Starbucks’ new CEO, the company noted that his work at Chipotle had “driven significant growth and value creation,” with revenue nearly doubling and profits higher.
Narasimhan, a veteran of PepsiCo and other consumer brands, took the top spot in 2023 after a stint working with longtime Starbucks CEO and interim boss Howard Schultz.
During his tenure, Narasimhan innovated in the brand’s supply chains and enhanced its store operations, the statement said.
Nicole will begin her new role on September 9, while Starbucks Chief Financial Officer Rachel Ruggeri will serve as interim CEO.
(Other than the headline, this story was not edited by NDTV staff and was published from a syndicated feed.)